Charles Arlinghaus: Bad timing makes GOP plan same as Dems'

On Medicaid expansion, there is no relevant difference between the Republican and Democratic proposals being considered by the special session. An important flaw in the Senate Republican plan makes it roughly the same as the proposal pushed by the governor and the House Democrats.

Today, Medicaid covers people in specific eligibility categories rather than basing eligibility on income. To be eligible, one has to be poor (or middle income depending on the category) and also in a specific population (disabled or pregnant or diagnosed with breast cancer, for example).

The expansion envisioned by the federal government would change the program to make everyone under 138 percent of the federal poverty level Medicaid eligible.

The largest newly eligible population under this scenario would consist of childless adults who are not covered at any income level today. About 135,000 people are currently covered by Medicaid. The proposed expansion would increase that total by as much as 50 percent.

In New Hampshire, a little less than half of the newly eligible population already has insurance or access to insurance through their employers. Both Republicans and Democrats would require those individuals to access that insurance and then use the Medicaid expansion budget to provide wrap-around coverage for co-payments, deductibles, and additional premiums.

The governor's plan would simply make everyone else in the expansion population eligible for one of the Medicaid plans offered by the three Medicaid managed care companies we are contracting with.

In the first year of their plan, Senate Republicans would do the same thing. They call it a bridge program but it is specified in the law as the same Medicaid coverage offered by the same Medicaid managed care companies and paid for with the same Medicaid dollars. There is no difference.

There is no need to consider the Republican plan any further because everything beyond that is moot. Their other ideas could only begin IF the federal government approved a waiver to their Medicaid rules. Except they wont.

They will deny the waiver and the program "will end." Except it won't. The future path is quite predictable.

Medicaid rules are set in Washington. To design our own program or make any significant change, we need to ask the federal government for permission or a "waiver" of the specific regulations. Waivers are often granted for little things but are rarely granted for large scale approaches that differ from what the administration then in power wishes.

We have no bargaining power to get a waiver when the administration strongly prefers the status quo to the change we are asking for. Currently we are in an unusual situation. The powers that be would very much like us to expand Medicaid, preferably in the manner they've fashioned. Because they want a change to the status quo, we are in the unusual position of having bargaining power.

To adopt the Obamacare style expansion even for a year is to abandon all bargaining power for a position of weakness. The administration no longer needs us to change, they'll just want us to continue the newly adopted program. And they know it won't really expire no matter what the law says.

The future looks something like this: After the federal government denies our requested waiver, the governor will immediately call another special session in September, 2014 to "deal with the crisis." The House will pass a continuation of the Senate Republicans' "bridge program" which is the same as what they want anyway. "We tried but the federal government said no. Let's join together to continue this program. It won't cost any state dollars and that way we don't throw 40-60,000 people out of their Medicaid bridge insurance." In September or October of an election year, the current Senate is very likely to acquiesce.

If the later years of the Republican program were a good idea (and there are kernels of good ideas), it only makes sense to ask for permission now when you still have some bargaining power. To abandon that bargaining position turns your theoretical future plans into meaningless window dressing.

There are many reforms that people drafting the law would agree to if they didn't worry about the federal permissions. But if any changes are worth having they are only possible if you do them first. Changes you save until after you expand and hope the feds approve anyway will never ever happen.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.